Is the Rush to Outource in China Finally Slowing?

GM Nameplate, a large, Seattle-based manufacturer, had plans to move more of its manufacturing to China, but decided to keep its existing manufacturing base in the United States after facing challenges at its Chinese plant.

The Chinese plant, based in Dong Guan, will continue to manufacture nameplates for customers operating in China such as Flextronics. But U.S. customers, most of whom are in the aerospace or medical sectors, will be supplied from GM's U.S. manufacturing plant, said Bradley Root, President of GM Nameplate's Washington division.

"In the U.S. we have a strong quality control system. To make that philosophy stick, we need good line supervisors to enforce the program. But manufacturing supervisors are hard to get and retain in China," Root said.

Root said GM also chose to keep manufaturing in the U.S. because its U.S. customers value components manufactured in the U.S.He said local manufacturing results in better quality, greater timeliness and improved communications.

"We usually prototype a product in the U.S. When we transfer it, we often find the facility in China can't do it well," says Root. "If you are there it's easy to solve problems, but it's hard to deal with these things over the phone, especially if it is someone's second language."

Root says GM is experiencing strong growth. As part of its plans to accommodate that growth and to consolidate its various facilities, GM is looking for new, larger facilities perhaps in the Kent Valley.

Past Experience: Boeing’s Long History with China

China-born Wong Tsu, pictured in the foreground, was the first aeronautical engineer Bill Boeing hired at his fledgling airplane company. Wong, a graduate of MIT, designed the Model C bi-wing trainer, Boeing’s first commercial success. (The U.S. Navy bought 50.) The two-seat, open-cockpit seaplane — the first “all-Boeing” design — made its inaugural flight on November 15, 1916, over Lake Union. Wong returned to China in 1917 and helped establish that country’s aviation industry, ultimately designing more than two dozen aircraft.